SEVENTH CLEAN ENERGY MINISTERIAL

SEVENTH CLEAN ENERGY MINISTERIAL

Michael LiebreichChairman of the Advisory BoardTwitter: @mliebreich

San Francisco2 May 2016

1Michael Liebreich @MLiebreichSeventh Clean Energy Ministerial, 2 June 2016

THE PARIS OPPORTUNITY

Image: UNFCCC


Source: UNFCCC, UNEP, Climate Action Tracker

Bloomberg New Energy Finance

GLOBAL GREENHOUSE GAS EMISSIONS(GTCO2)

30

35

40

45

50

55

60

65

1990 1995 2000 2005 2010 2015 2020 2025 2030

Historical emissions

INDC trajectory

Pre-COP21 pledges

30

35

40

45

50

55

60

65

1990 1995 2000 2005 2010 2015 2020 2025 2030

Historical emissions 2°C trajectory

INDC trajectory

Pre-COP21 pledges

3Michael Liebreich @MLiebreichSeventh Clean Energy Ministerial, 2 June 2016Source: Bloomberg New Energy Finance

GLOBAL PRIMARY ENERGY SUPPLY (MTOE)

10,000

5,000

1,000

0

Renewable energy

Natural gas

OilCoal

Nuclear


Note: BNEF adjusted IEA NPS forecast using its own electricity generation and EV demand forecast. Renewables total includes bioenergy and hydro. Source: Bloomberg New Energy Finance, IEA

GLOBAL PRIMARY ENERGY SUPPLY, 1975 (MTOE)

10,000

5,000

1,000

1975

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

1980

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

1985

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

1990

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

1995

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

2000

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

2005

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

2010

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

2015

Renewable energy

Natural gas

OilCoal

Nuclear




10,000

5,000

1,000

2015

Renewable energy

Natural gas

OilCoal

Nuclear

BNEF 2040




10,000

5,000

1,000

2015

Renewable energy

Natural gas

OilCoal

Nuclear

BNEF 2040

IEA 450ppm 2040


Note: BNEF adjusted IEA NPS forecast using its own electricity generation and EV demand forecast. Renewables total includes bioenergy and hydro. Paris illustrative scenario assumes some carbon capture. Source: Bloomberg New Energy Finance, IEA


10,000

5,000

1,000

2015

Renewable energy

Natural gas

OilCoal

Nuclear

BNEF 2040

IEA 450ppm 2040

Illustrative Paris scenario

before 2100


We need anenergy miracle

Picture: Bloomberg

ENERGY MIRACLE

Bill GatesFebruary 2016


$62bn$88bn

$128bn

$175bn$206bn $207bn

$274bn

$318bn$297bn

$272bn

$316bn$329bn

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$146/bbl

Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). Excludes large hydro.

Source: Bloomberg Intelligence, Bloomberg New Energy Finance

CLEAN ENERGY INVESTMENT ROSE WHILE OIL PLUMMETEDGLOBAL CLEAN ENERGY INVESTMENT VS WTI CRUDE SPOT 2004-15

$48/bbl

Record investment

18Michael Liebreich @MLiebreichSeventh Clean Energy Ministerial, 2 June 2016Source: UNEP, Bloomberg New Energy Finance

INVESTMENT IN POWER CAPACITY, 2008–15 ($BN)

Renewables ex large hydro

Fossil fuel

Nuclear

Large hydro

0

50

100

150

200

250

300

2008 2009 2010 2011 2012 2013 2014 2015

19Michael Liebreich @MLiebreichSeventh Clean Energy Ministerial, 2 June 2016Note: New investment volume adjusts for re-invested equity. Total values include estimates for undisclosed deals. Source: Bloomberg New Energy FInance

RENEWABLE ENERGY INVESTMENT, 2004–15 BY REGION ($BN NOMINAL)

5.611.9

29.133.2

35.5

23.9

34.7

49.140.6

35.337.0

44.1

'04'05'06'07'08'09'10'11'12'13'14'15

United States

0.83.15.211.411.8

7.97.210.27.74.48.07.1

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Brazil1.73.33.75.06.15.5

12.09.310.112.0

13.312.8

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

AMER (excl. US & Brazil)

24.833.3

46.9

66.881.882.7

113.4122.9

89.0

60.062.0

48.8

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Europe

7.39.010.012.413.613.919.3

23.830.2

44.448.8

47.6

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

ASOC (excl. China & India)

3.08.311.2

16.725.6

38.839.6

47.461.7

62.087.8

102.9

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

China

2.73.04.96.75.64.38.8

12.87.86.68.3

10.2

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

India

0.60.81.11.82.31.64.13.010.29.37.9

12.5

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Middle East & Africa


2011 UNSUBSIDISED CLEAN ENERGYWORLD RECORDS

Source: Bloomberg New Energy Finance; ImagesSiemens; Wikimedia Commons

ONSHORE WIND SOLAR PV

US$ 6.2 cents/kWh US$ 17 cents/kWh





Location:Bidder:Signed:Construction:Price:

MoroccoEnel Green PowerJanuary 20162018US$ 3.0 c/kWh


PeruEnel Green PowerFebruary 20162017US$ 4.8 c/kWh








Coahuila, MexicoEnel Green PowerMarch 20162018US$ 3.6 c/kWh







Location:Bidder:Signed:Construction: Price:

DubaiMasdar ConsortiumMay 20162019US$ 2.99 c/kWh


0.1

1

10

100

1 10 100 1,000 10,000 100,000 1,000,000

2003

1976

1985

2008

Cumulative capacity (MW)

Current 2015 price

WIND AND SOLAR EXPERIENCE CURVES

Note: Pricing data has been inflation corrected to 2014. We assume the debt ratio of 70%, cost of debt (bps to LIBOR) of 175, cost of equity of 8%

Source: Bloomberg New Energy Finance

Note: Prices are in real (2015) USD. ‘Current price’ is $0.61/W

Source: Bloomberg New Energy Finance, Maycock

ONSHORE WIND LEVELISED COST ($/MWh) SOLAR PV MODULE COST ($/W)

Learning rate 24.3%

MODULE COSTS HAVE FALLEN

99% SINCE 197680% SINCE 2008

y = 3,582.42x-0.30

R² = 0.91

16

32

64

128

256

512

1,024

100 1,000 10,000 100,000 1,000,000

1985

20252014

Learning rate =19%R² = 0.91

Thailand

Brazil

Germany

US

H1 2015

19992009

1,024

512

256

128

64

32

100 1,000 10,000

16

100,000 1,000,000

Learning rate 19%

1985

1999

2009

20142025

H2 2015

Learning rate 19%

WIND COSTS HAVE FALLEN

50% SINCE 2009


RENEWABLE ENERGY - THE MARCH OF THE PRICE SIGNAL

Market-based mechanisms – eg renewable energy auctions, certificate schemes, renewable portfolio standards

Feed-in tariff/premiums

Mixed

Countries with auction or tender programmes

2000





Mixed


2001



Mixed






Mixed


2002



Mixed






Mixed


2003



Mixed






Mixed


2004



Mixed






Mixed


2005



Mixed




Market-based mechanisms – eg, renewable energy auctions, certificate schemes, renewable portfolio standards


Mixed


2006



Mixed






Mixed


2007



Mixed






Mixed


2008



Mixed






Mixed


2009



Mixed






Mixed


2010



Mixed






Mixed


2011



Mixed






Mixed


2012



Mixed






Mixed


2013



Mixed






Mixed


2014



Mixed






Mixed


2015



Mixed






Mixed


2016



Mixed


42Michael Liebreich @MLiebreichSeventh Clean Energy Ministerial, 2 June 2016Source: Bloomberg New Energy Finance

PRICE IMPACT OF SWITCH FROM FIT TO AUCTIONS, SELECTED COUNTRIES (NORMALISED)

0

20

40

60

80

100

120

140

160

+3+2+10-1-2-30

20

40

60

80

100

120

140

160

+3+2+10-1-2-3

Solar PV(unit price normalised to 100 at date of first auction)

Onshore Wind(unit price normalised to 100 at date of first auction)

: non-tariff price signals

: tariffs

: auctions

KEY

EMEA

Other LatAmBrazil

India

South Africa

- 30% - 50% - 35% - 60%


ENERGY MIRACLE – SOLAR?

Images: Gatesnotes.com, D-Light; Source Bloomberg New Energy Finance


9 15 21 30

40 51

62 74

2 4

4 6

8

12

17

25

1 2 5 11

19 25

36

48

62

79

99

2010 2012 2014 2016f 2018f 2020f

Note: Large solar home systems are defined as larger than 10W solar panels. Historical data is based on Lighting Global and GOGLA data and Bloomberg New Energy Finance estimates.

Source: Bloomberg New Energy Finance, Lighting Global, GOGLA

OFF-GRID SOLAR USERS (MILLION HOUSEHOLDS)

Large solar home systems

Portable solar lanterns and small home systems

or


Tesla Model 3

BMW i3

VW e-Golf

Chevy Bolt

Nissan LeafImages: Tesla, BMW, VW, GM, Nissan

EV MASS MARKET$30,000 + 200 MILES RANGE


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

20

40

60

80

100

120

140

2015 2020 2025 2030 2035 2040

m vehicles sold per year % of new car sales

Note: forecast uses Gasoline and electricity prices from EIA’s 2015 Annual Energy Outlook ‘Low Oil Price’ scenario (ranging from $50 to $65 per barrel between 2015 and 2025). High scenario assumes greater vehicle utilisation. Low scenario assumes $20 per barrel oil price Source: Bloomberg New Energy Finance

GLOBAL LIGHT DUTY VEHICLE AND EV ANNUAL SALES, 2015–40 (M VEHICLES SOLD PER YEAR, %)

By 2040Up to 50%

of new cars will be EVs

Shared vehiclescenario

$20 oilscenario

ICE + HEV BEV PHEV EV % of new sales


0%

5%

10%

15%

20%

1971 1976 1981 1986 1991 1996 2001 2006 2011 2016

Note: TOE is tonnes of oil equivalent Source: Bloomberg New Energy Finance, IEA

ELECTRIFICATION OF GLOBAL ENERGY DEMAND

0

2

4

6

8

10

12

1971 1976 1981 1986 1991 1996 2001 2006 2011 20160

2

4

6

8

10

12

1971 1976 1981 1986 1991 1996 2001 2006 2011 20160

2

4

6

8

10

12

1971 1976 1981 1986 1991 1996 2001 2006 2011 2016

Electricity

Transport fuels

Non-transport

fuels

Heat

ELECTRICITY SHARE OF FINAL ENERGY CONSUMPTION (%)STRUCTURE OF FINAL ENERGY (BN TOE)

On current trends, the world

economy will be 100% electric by

the year 2340

+0.25% per year


MANAGING INTERMITTENCYTHE BIG CHALLENGE – THE BIG OPPORTUNITY

II. CONTINUOUS BALANCING

III. CONTROLLING FREQUENCY

I. PLANNING FOR EXTREMES

Demand

Variable supply

Years to Months Days to minutes Seconds to minutes

Source: Bloomberg New Energy Finance


I'm not sure whether the optimists or the pessimists are right, but I do know this: it is the optimists who will get something done.

CRAIG VENTER

Unique analysis, tools and data for decision-makers driving change in the energy system

[email protected]

MARKETS Renewable EnergyEnergy Smart TechnologiesAdvanced TransportGas Carbon and RECs

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Michael LiebreichTwitter: @MLiebreich

Thanks!

SEVENTH CLEAN ENERGY MINISTERIAL

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